Clinton Back to Work; Obama to Nominate Hagel Today; The Case Against Holmes

Aired January 7, 2013 - 05:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN BERMAN, CNN ANCHOR: Big new developments in the health of Secretary of State Hillary Clinton. She is back to work today after being sidelined with those serious health issues.

ZORAIDA SAMBOLIN, CNN ANCHOR: The case against accused Aurora movie theater shooter James Holmes. We are just hours away from prosecutors unveiling their evidence in court.

BERMAN: And the biggest scandal to hit Washington since Watergate. Call it knee-gate.

SAMBOLIN: Seriously.

BERMAN: What is one of the NFL's brightest stars doing in the game with a bum knee, only to injure it again -- maybe even worse.

SAMBOLIN: I cannot tell you how we have been discussing this, this morning. It's just -- it's a story.

BERMAN: There is outrage. There is consternation in Washington right after the fiscal cliff. Can they get no reprieve after all the problems they've had?

SAMBOLIN: Oh, my goodness.

BERMAN: Good morning. Welcome to EARLY START. I'm John Berman.

SAMBOLIN: Nice to have you back, Mr. Berman.

I'm Zoraida Sambolin. It is January 7th, and it is 5:00 a.m. in the East.

So, up first here, the president preparing for another bruising battle with Republicans over his choice to head up the Defense Department. The choice is former Republican Senator Chuck Hagel of Nebraska. We are told the announcement is coming today. And the nomination process could get nasty, because GOP leaders are already drawing battle lines, questioning Hagel's support of Israel and his unwillingness to back sanctions against Iran.

Listen to South Carolina's Republican Senator Lindsey Graham yesterday on CNN's "STATE OF THE UNION".

(BEGIN VIDEO CLIP) SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This is an in your face nomination by the president to all of us who are supportive of Israel. I don't know what his management experience is regarding the Pentagon, little if any. So, I think it's an incredibly controversial choice and it looks like the second term of Barack Obama is going to be an in your face term.

(END VIDEO CLIP)

SAMBOLIN: Foreign affairs correspondent Jill Dougherty is live from Washington this morning.

Good morning to you.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Good morning.

SAMBOLIN: So, opposition to Hagel comes from both the right and left, and hinges on a number of different issues. Can you actually break down those issues?

DOUGHERTY: Yes. I think it has to really start with Israel because the people who believe that he is not a supporter of Israel, in fact, they would question his devotion to anything that would help Israel. He, for instance, believes in talking to Hamas.

He also has come out against Iran sanctions by the United States. And so, that gets other people very worried about his position.

He opposed the surge in Afghanistan, for instance.

And when you get into that issue, the gay issue, so called, about 14 years ago he made some comments about an ambassadorial nomination who was, as he put it, openly and aggressively gay. Now, that's, of course, a buzz saw of criticism. So, it's not going to be an easy type of nomination certainly as you can imagine.

SAMBOLIN: So, Jill, why did the president pick Hagel?

DOUGHERTY: You know, they have some similar views. He is a maverick, that's true, but he also, I think you have to say, is kind of a moderate realist.

And he also has some good credentials. He's a Vietnam veteran. He heads the prestigious think tank, the Atlantic Council. And, certainly, the president would believe that they share at least similar views. But the president, of course, is in charge on policy.

SAMBOLIN: All right. So, Democrats hold a majority in the Senate. Is it possible Hagel will not get enough votes?

DOUGHERTY: I think the White House, we'd have to say, believes that they will, but it's not going to be an easy thing at all.

SAMBOLIN: All right. So let's switch gears here. Secretary of State Hillary Clinton returns to work today. What's on her schedule? DOUGHERTY: Well, she has an amazingly big schedule this week, you know, away for almost a month. But they wanted -- she wanted to come back, they said she wanted to come back and really get to work.

So, if you look at the schedule, today, she comes back 9:15 sharp. She'll be over at the State Department. She will be meeting with the assistant secretary. And then this week, she has a number of meetings at the White House and then finally, Hamid Karzai comes. They'll be talking Afghanistan on Friday.

SAMBOLIN: Well, she did -- her spokesperson said she was raring to go, so I suppose full speed ahead. Jill Dougherty live at the White House for us -- thank you.

BERMAN: You know, I'm not really joking at all when I see all this candidate stuff will be overshadowed today --

SAMBOLIN: Oh, I believe you.

BERMAN: -- by the Redskins and what happened last night.

The NFL season ended badly for the Washington Redskins. That is the understatement of the century. Their playoff loss to Seattle, not even the worst of it.

What happened? Well, the Seattle (INAUDIBLE) the Redskins, 14 points, but then they scored 24 straight points to beat the Redskins. This 27-yard run by Marshawn Lynch for Seattle in the fourth quarter.

But the really bad news, I'm talking the awful, epically tragic news. You're seeing it here, RG3, the superstar rookie quarterback for the Redskins re-injured his knee in the game. No one even touched him.

There's no word on the extent of the injury. Clearly not pretty. You heard it again in the first quarter. A lot of people asking why Coach Mike Shanahan did not pull him out in the first quarter. He was completely ineffective after he started limping in the first quarter. So many questions today.

Oh, yes, by the way, Seattle won and they will play Atlanta next weekend.

SAMBOLIN: All right. The Baltimore Ravens are also moving on in the AFC playoffs. They beat the Indianapolis Colts 24-9 on Sunday. It was the last home game for the soon to be retired Ray Lewis. Ravens quarterback Joe Flacco threw down two touchdown passes including one to Anquan Bolden who set a franchise record. The Ravens will meet Peyton Manning and the Denver Broncos next Sunday.

The waiting is over. Tonight in south Florida, the top ranked Fighting Irish of Notre Dame tangle with second ranked Alabama for the BCS Title. The Crimson Tide is a 10-poing favorite, but Notre Dame has a 5-1 all-time record against Alabama. These two teams haven't faced each other on the gridiron since 1987. How excited are you?

And each has nine national titles to its credit since the post-1936. The ball kickoff is 8:30 Eastern.

There is some other sports news, believe it or not. The lockout, the NHL lockout that put the hockey season on ice could soon be over. The league and the players association reached a tentative agreement early Sunday following a marathon bargaining session.

The proposed 10-year agreement must now go to NHL players and owners for approval. All signs show that they will approve it. And if they do, the players could be back on the ice to begin a shortened season as early as next week.

And, you know, what people always say in hockey, the only thing that matters is the playoffs. So, they'll have the playoffs. So, they'll have the thing people care about.

SAMBOLIN: Some people think more than the playoffs matter. But OK.

All right. President Obama signed into law a $9.7 billion superstorm Sandy aid package. Most of that will be used to pay flood insurance claims. The House and Senate will vote on a second $51 billion package. That's on January 15th.

House Speaker John Boehner received harsh criticism last week from New Jersey Governor Chris Christie and New York Congressman Peter King, both of them Republicans, when he refused to bring a $60 billion Sandy bill up for a House vote.

BERMAN: Syrian President Bashar al-Assad defiant and refusing to step down. He made his first public speech six months this weekend, dismissing any chances that peace talks with rebel forces. He called them murderous criminals and called on the West to stop funding them.

SAMBOLIN: And we're about to learn a lot more about accused Aurora gunman James Holmes and the evidence against him. We go live to Colorado for a preview of today's hearing. That's coming up.

(COMMERCIAL BREAK)

BERMAN: Welcome back to EARLY START, everyone.

In just a few hours, James Holmes, the suspect in the Aurora, Colorado, movie theater massacre will be in court for a key preliminary hearing. Prosecutors will begin presenting evidence and for the first time, the public will hear details of what went on inside that theater during the shooting rampage back in July. CNN's Casey Wian is live this morning in Centennial, Colorado. Good morning, Casey.

CASEY WIAN, CNN CORRESPONDENT: Good morning, John. You know, it's been six months since James Holmes allegedly gunned down dozens of people, killing 12 in a Colorado movie theater. Even today, the sights and sounds of that day are both chaotic and disturbing.

(BEGIN VIDEOTAPE)

WIAN: Aurora, Colorado, just after midnight July 20th, 2012.

DISPATCHER: Three-fifteen and 314, first shooting at Century Theaters, 14 300 East Alameda Avenue. They're saying somebody's shooting in the auditorium.

EYEWITNESS: He came down with his gun in my face. He was about three feet away from me at that point. In that instant, I honestly didn't know what to do. I was terrified.

POLICE: We need to rescue inside the auditorium, multiple victims.

WITNESS: Right by the exit, just firing away. He's not aiming at a specific person. He's just aiming everywhere trying to hit as many people as he can.

POLICE: I've got a child victim. I need rescue at the back door of theater nine, now.

WITNESS: Just got to get out. Just got to get out the door. Just get my kids out of here. It was just so horrible.

POLICE: Suspect is going to be a male, unknown race, black camo outside outfit believed to be wearing a vest, gas mask, and multiple long guns.

UNIDENTIFIED MALE: You have the right to remain silent.

WIAN: That suspect, 25-year-old James Holmes, is charged with killing 25 people and wounding dozens more.

Prosecutors are expected to call scores of witnesses before Arapahoe County District Judge William Sylvester. He'll determine whether the evidence is sufficient for Holmes to stand trial on more than 150 counts, including murder, attempted murder, and weapons charges.

The weapons included explosives allegedly used to booby trap Holmes' apartment. His attorneys are expected to present a diminished mental capacity defense.

RICK KORNFELD, ATTY./FORMER PROSECUTOR: The government is going to absolutely say that. The government is going to say this guy wasn't crazy.

He was crazy like a fox. He was conniving. He was premeditated. He was methodical. And that all may be true, but at the same time, you can be all those things. But you can also have a mental disease or defect.

WIAN: He had been seeing a psychiatrist at the University of Colorado, where he was a doctoral candidate in neuroscience until dropping out in June. His attorneys say he was hospitalized in November after repeatedly banging his head into a jail wall.

(END VIDEOTAPE)

WIAN: Now up until now, the judge has had a sweeping gag order in place. So, as you mentioned earlier, John, this is going to be the first time the public is going to be able to hear a lot of evidence the prosecution has against James Holmes -- John.

BERMAN: Casey, I have to say it was chilling to hear all that sound from that morning, that night especially in light of what the country just went through in Newtown. It's amazing to hear that way back in July.

This hearing will not be quick, am I right? I mean, there's a mountain of evidence. We're expecting to hear from a lot of people.

WIAN: Yes, there could be as many as 70 witnesses. We're expecting this could last as long as a week. We don't know how much the defense is going to put on, but it's expected they'll begin to lay the groundwork for what's expected to be a diminished mental capacity defense. We know that because of some of the court filings that happened made public, John.

BERMAN: What about a plea from Holmes, did we hear anything about that yet?

WIAN: Nothing yet. That would come at his arraignment assuming that the judge finds that there's enough evidence for him to stand trial. No one expects the prosecution to have any difficulty showing that.

BERMAN: And there is a great deal of interest in this trial around the country, but I'm also sure in Aurora, Colorado. Will some of the family members of the victims be there in person?

WIAN: Some of the family members will be in the courtroom, in person. Some of them apparently do not want to be in the same room as James Holmes. So, there will be some who will be in, sort of, an overflow room that will include members of the media because they just don't want to be in the same room as this guy, John.

BERMAN: All right. Casey Wian, live for us this morning in Centennial, Colorado -- thanks a lot, Casey.

SAMBOLIN: At 6:00, we're going to talk to a lawyer about the nuances and the laws there declaring somebody insane. So, we'll dig a little bit deeper into that story.

Fifteen minutes past the hour. Let's get you up-to-date. Here's Christine Romans with our top stories. CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good Monday morning to both of you.

Former Nebraska Senator Chuck Hagel is President Obama's likely choice to be the next Secretary of Defense. The nomination is expected to be announced today. And even though Hagel is a Republican, Republican leaders are already challenging the pick, questioning Hagel's support for Israel, and questioning his unwillingness to back sanctions against Iran.

Hillary Clinton heads back to work this morning. The Secretary of State was discharged from a New York hospital on Wednesday. This will be her first day back on the job since being sidelined by an illness, a concussion, and a blood clot.

She has meetings first thing this morning with her assistant Secretary of State. And after a full day of meetings tomorrow, she'll be greeting Afghan President Hamid Karzai when he visits Washington Friday.

Shell Oil says that drilling rig that ran aground across the coast of southern Alaska is ready to be towed away today. Recovery could begin today. Company officials say there's no signs of any oil leaked. The rig was being towed back to its home in Seattle when it ran aground in a severe storm about a week ago.

And it was horror over "Hobbit" at the movies this weekend. "Texas Chainsaw 3D," the remake of that 1974 classic. It took down the three time box office champ. "Texas Chainsaw" was number one, earning $23 million in opening weekend. "Django Unchained", number two, taking in $20 million. And "The Hobbit: The Unexpected Journey" fell to third making $17.5 million.

BERMAN: No respect for Bilbo man? Show Bilbo some love.

SAMBOLIN: Two violent ones, number one and number two. Thanks, Christine.

ROMANS: You're welcome.

SAMBOLIN: It is 16 minutes past the hour. We're getting an "Early Read" on your local news that is making national headlines.

So, from "The Wall Street Journal," a revealing interview with House Speaker John Boehner about the recent fiscal cliff debacle. The Ohio Republican claiming one thing stunned him more than anything else, it's when the president told him we don't have a spending problem, we have a health care problem. Boehner said he was astonished by that remark.

And at one point, the speaker told "The Journal" reporter, quote, "I need this job like I need a hole in the head."

BERMAN: A lot of people trying to write their own history of these debates and discussions right now. I think that's what's going on with that. SAMBOLIN: Yes.

BERMAN: All right. In "The Tampa Tribune," a man who police say was shot during a hate crime. He had a gun but he decided not to use it in his own defense. Now, surveillance video from a Wal-Mart parking lot shows Cameron Mohammed getting shot with a pellet gun from point blank range.

The Pasco County sheriff's office says the alleged shooter, 25-year- old Daniel Quinnell (ph), asked Mohammed if he and his girlfriend were Muslim or from the Middle East. The man said no. Investigators say Quinnell fired 20 shots and then walked off.

SAMBOLIN: Wow.

BERMAN: Get this, it was Quinnell's mother, the shooter's mother, who turned him in to police and helped police find him.

SAMBOLIN: Wow, that's incredible.

BERMAN: And that guy, again, the victim there, had a handgun but decided not to use it in his own defense because the shooter, the guy who was shooting at him, was using a pellet gun and he figured it would be unfair.

SAMBOLIN: That's terrible.

All right. Eighteen minutes past the hour. For an extended look at all our stories, just head for our blog, CNN.com/EarlyStart. You can follow us on Twitter and we're also on Facebook for you. Just search for EarlyStartCNN.

BERMAN: It is a big bright spot in our economy right now. Coming up, what auto sales say about the state of this economy heading into the New Year.

(COMMERCIAL BREAK)

BERMAN: This is New York City you're looking at here.

SAMBOLIN: Top of the morning to you, New York City. Come hang out with us. Grab your cup of coffee.

We're going to be minding your business this morning. U.S. stock futures are trading flat ahead of the opening bell.

BERMAN: Looks like some of the attention is off Washington because earning season kicks off this week. And we have some pretty good news for the banking sector.

ROMANS: Yes, overnight there was a big story, I guess if you will, out of Europe where Basel I'm not going to too wonky on this for you.

But basically some bank regulations, international bank regulations, pushed off four more years and watered down, many analysts were saying. So, bank stocks around the world are rallying. We still have futures basically flat here. So, we'll watch to see if the banking sector is the driver.

But, you know, there's a saying, the stock trader almanac has a saying about the first five days of the year. It's really an automatic warning system for the rest of the year. The first five days if they do well, you usually get a very good year for stocks -- 38 times January the first five days have done well, 33 of those years, the S&P has done better.

So, let me show you what we've done the first five days of the year. S&P, the Dow, all of them higher. NASDAQ is up 4.58 percent.

As John said, earnings will be the driver going forward from here. But at least the start of the year has been pretty, pretty good. And the historical precedent is that can be good for the overall year.

Let me tell you where we are in the economy right now, because we had great news late last week about car sales. You know, if you're going to shell out $38,000 for a car, or you're going to be able to borrow money to buy a car, that shows you have a little bit of economic confidence, right?

Auto sales, five-year high. Housing, this year we're expecting housing to go higher. The only thing holding us back, guys, political uncertainty and that mediocre jobs growth.

So, that's the balance in the economy overall as I see it right now. And that's what investors are grappling with.

BERMAN: So, a lot of people still paying for 2012.

ROMANS: Oh, yes.

BERMAN: Dealing with their credit cards right now.

But heading into 2013, what does it look like we'll be paying more for?

ROMANS: This is the time we're taking stock, and what kind of prices will be going up. We'll tell you, corn overnight rallying again. We've seen a huge rise in corn prices. That feeds into cereal, snack foods and also meat. You can expect to pay 3 percent to 4 percent more for hamburger this year.

Rent prices in December are up 5 percent year over year. We're expecting rent prices to decline.

Mail at the end of this month it will be another penny to cost you to get a stamp. Grab forever stamps, everyone. So, mail prices going up.

And public transit in some big cities like New York considering it, also in Chicago where some of the monthly taxes are going up. You can expect fares to go up around the country. So, your commute probably going to get a little bit more expensive.

So, those are just a little bit of a rundown of what we're expecting to cost you more this year in 2013.

BERMAN: You eat burgers while you ride the subway, and --

ROMANS: Well, the good news is everyone is getting a 5 percent or 6 percent raise this year. Oh, wait, they're not.

(LAUGHTER)

SAMBOLIN: Plan accordingly. Thank you, Christine.

ROMANS: You're welcome.

BERMAN: Really, the only thing that any of us want to talk about this morning is football. By any of us I mean me. A star player suffers a nasty injury in a big game. There is so much second guess.

SAMBOLIN: Question.

BERMAN: Monday morning quarterbacking. A lot of people are blaming the coach. We'll have more on the RG3 or R.G. knee controversy, coming up.

You're leaving the house right now, you can watch us on your desk top or mobile phone. Just go to CNN.com/TV.

(COMMERCIAL BREAK)

SAMBOLIN: Agony of defeat. One of the NFL's brightest young stars suffers a frightening injury when many say he should never have been on that field.

BERMAN: Absolutely not.

All right. Not a proud moment for Kentucky's Rand Paul. A senator's son arrested after an alleged incident at an airport.

SAMBOLIN: Corporations are people. A traffic court judge will have to decide, thanks to a man caught driving solo in the carpool lane.

Welcome back to EARLY START. We're happy you're with us. I'm Zoraida Sambolin.

BERMAN: I'm John Berman. It is January 7th. It's about 29 minutes past the hour right now.